Other views: Detroit can cut pensions; but should they?

A federal bankruptcy court judge's ruling on Monday that Detroit's employee pensions can be cut sent shockwaves across the nation and could herald a new era of broken promises to public employees.

For decades, cities have underfunded employee pension funds, counting on investments to cover the gap and legal provisions that said the pensions were untouchable.

Judge Steven W. Rhodes changed all of that on Monday, ruling that federal bankruptcy law trumped state statutes and constitutional guarantees.

"Pension benefits are a contractual right and are not entitled to any heightened protection in a municipal bankruptcy," he said.

Emergency manager Kevin Orr has yet to submit a reorganization plan, which would still require Rhodes's approval, but the ruling is a game changer that has public worker unions nationwide worried about the implications for their own pensions.

The ruling means that cities are under no legal obligation to keep their promises to pensioners, who make on average less than $20,000 annually. Should they? And what should cities, their workers and their unions take away from the ruling?

Detroit Free Press

It's your state, Governor.

And that means Detroit's problems are your problems.

Detroit emergency manager Kevyn Orr sees no way to restructure the city's debts and liabilities without cutting pension benefits, and U.S. Bankruptcy Judge Steven Rhodes ruled Tuesday that the state's constitutional protection for pensions doesn't carry any weight in federal court.

But if the $3.5 billion Detroit owes its pension funds, and the payments it makes to retirees, is reduced, thousands of senior citizens will be left with depleted resources and few options.

It's unacceptable.

The City of Detroit made promises to its workers, promises it can no longer keep. And in 1963, the residents of Michigan chose to approve a constitution that protected pensions.

Gov. Rick Snyder took an oath to uphold that constitution. And now he must.

Instead of fighting the ruling and risking an even more consequential defeat at the Supreme Court, unions should be pondering its lessons. The most important of these is that their positions in collective bargaining should reflect what's good for their members and what's sustainable for their city governments and the taxpayers who support them. The goal should be to ensure that future retirees can count on what is promised them because the promises are founded in fiscal reality.